What is investment management software?

Investment management software is a platform for managing an organization’s investment portfolio and financial assets. It offers integrated tools to track portfolio activities, investment funds, and audit compliance standards. 

The software is closely related to banking software and financial risk management software , offering several similar functionalities. For these reasons, it suits individual investors, traditional investment firms, and alternative investment vendors such as hedge funds.

The benefits of investment management software

Investors have to closely monitor their mutual and exchange-traded funds every day. The software offers various benefits that help businesses streamline their workflows, stay compliant of regulatory norms, and increase productivity.

Here are some details of the software’s benefits:

• Get real-time performance analysis: Investment management software tracks account activities to update financial advisors on their portfolio’s performance. It helps them compare performance at the start and end of a specific time period. They can also see real-time results, which helps them instantly calculate gains and losses. 
• Manage all your investment accounts in one place: Investment managers can group portfolios and categorize each one for easy reference. They can monitor all the investments from a central location, even if the funds are distributed among multiple accounts or geographies and have varied brokerage charges.
• Track stock markets to make informed decisions: It’s vital to select the right stocks for investment. The software sets up watchlists based on your requirements, so that you can select the best options from the lists. It also helps investors track free online sources for potential securities portfolios, in which they can invest.

Typical features of investment management software

• Data import/export: Import and export information as well as reports—in PDF or Excel formats—to and from the investment management software.
• Investments tracking: Monitor capital allocation and asset prices over time.
• Benchmarking: Compare key metrics of your business against the metrics of prominent market players in your industry.
• Client management: Organize your firm's interactions with current and potential customers.
• Compliance reporting: Audit, track, and report regulatory data to your internal and external stakeholders.
• Bonds/stocks: Purchase and track the bonds and stocks in a customer’s portfolio.

Considerations when purchasing investment management software

• Ease of implementation and use: Vendors are working on better user experience as customers choose systems that are easy to implement and use. A majority of the workforce will dump their financial partner if offered a better technological experience by another firm. Therefore, the tool you choose should be easy to use for employees and clients. An easy-to-use interface will support clients in regularly capitalizing the benefits.
• Real-time risk and compliance reporting: The software should have capabilities for real-time risk valuation and calculation to help firms generate performance reports and develop strategies. It should have a rule-based compliance engine and ability to customize compliance workflows. It should help managers generate reports on risk ratios such as liquidity, exposure, value at risk to analyze risk attribution, and decomposition. 

Relevant investment management software trends

• Machine learning transforming how organizations serve clients: Predictive analytics and machine learning can help investors gather insights on vital market events that can impact a client’s portfolios. The insights help the software learn and suggest the next best action for the client. Self-learning modules can track visitor activity and  learn about their interests . Based on this info, advisors can modify their communication strategy to better engage with, and retain, clients.
• Greater focus on gaining, retaining millennial customers: Investors will largely target millennials as the latter starts dominating the workforce and earning higher amounts. However, millennials seek to invest in their own by checking online reviews and peer recommendations. To tap this demographic, firms need the latest technologies to communicate, facilitate payments, and ensure transparency. Offer a self-service platform to personalize their experience as well as consolidate and analyze their portfolio, so that millennials have full ownership of their assets.